Netflix currently has no plans to launch a free, ad-supported streaming service, but it’s also not ruling it out.
Speaking during Thursday’s earnings call, Netflix co-CEO Greg Peters said that “free viewing may make sense in some markets,” given the carrier’s strategy of offering multiple price tiers and its goal of increasing engagement on the platform. However, he noted that this is not something currently in the works.
“Free might make sense in some markets, but we have to think about unbundling the paid tiers. We have to make sure we’ve got the right offer, the right differentiation of that offer. And it’s probably also worth noting that having an effective, scaled ad business in any country that’s a candidate for such an offer is an important enabler to make these economies successful. So, that’s all to say that free is something we’ll continue to look at, but we don’t have any near-term plans to launch something,” Peters said.
“Maintaining and increasing reach, especially as we expand our content offering around the world, adds new customer segments,” he said. “That is a critical focus and goal for us. Improving long-term revenue is the other big goal.”
The question comes after A Wall Street Journal A report last week said that Netflix executives are considering adding live channels that continuously broadcast one show or specific genres, in an effort to boost viewer engagement.
Netflix beat earnings expectations for the second quarter, but beat expectations on revenue. Going forward, Netflix expects a slower pace of revenue growth than it has seen in recent quarters. In contrast, the carrier’s stock price hit a 52-week low on Thursday.
Meanwhile, FAST services began to take off. Tubi, which is owned by Fox, accounted for 2.3% of total TV viewing in the US in April, while The Roku Channel accounted for 3% of total TV viewing that month (Netflix still leads the other streaming services at 7.8%, but trails YouTube, which accounted for 13.4%). Fox also recently announced plans to acquire Roku and with it The Roku Channel to further its streaming ambitions.
